Whether it is artwork, stamps, jewelry, coins, antiques or more, many people in Parsippany enjoy collecting things. Some people collect many of these items over the course of their lifetime, resulting in a large collection that has not just sentimental value, but financial value as well. Therefore, they may want to think about how they will pass these collections on to their heirs through estate planning.
A person might leave a collection to an heir or donate it to a charitable institution. There are tax laws that apply to such distributions, so our readers will want to focus on creating an estate plan to pass a collection down to a loved one.
First, it is important to assign a value to the collection. Heirs can disagree about what a collection is worth. So, it is important for a person to obtain a professional appraisal of their collection from multiple sources while they are still alive. This way, their heirs can know what to expect, which could avoid estate litigation. It can also help to create a list of when you bought each collectible and for how much each item was purchased. If a person promises a loved one they will inherit a collection, this should be clearly stated in that person's estate plan.
Collections, just like any other asset, should be accounted for in a person's estate plan. Whether they are included in a will, placed in a trust or given as a gift, it is important to remember that there are certain steps that must be taken in order for these processes to be legally sound and enforceable. There are tax consequences that come with handing down a collection, so it is important to keep that in mind when estate planning. Collections may have a lot of sentimental value, but they can also have a significant amount of financial value as well.